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August demand for permanent and temporary IT staff surged in the UK to levels not seen since the end of the last century. But that sharp rise is still not necessarily matching growth experienced in other sectors.

Demand for permanent IT workers stood in second place in a nine-sector league table in August 2013 yet dropped a place this year, despite enjoying the steepest expansion since August 1998, according to the latest figures from the KPMG and Recruitment and Employment Confederation Report on Jobs monthly index.

Temporary IT demand ranked fourth in August last year but fell to eighth despite a similar record increase, with a seasonally adjusted index score of 65.6 in August, up from 64.2 in July. Demand for permanent staff increased from 68.4 in July to 70.4 in August on the index.

KPMG said the rapid expansion in demand underlined a continuing skills problem for companies attempting to hire technology staff.

"The desperation to fill recruitment holes is leading to continued wage growth, which is creating a market that is both unsustainable and unrealistic," KPMG CIO Advisory practice partner Heath Jackson said in a statement.

"It's a conundrum British business will have to solve quickly because if the job market stagnates, the wider impact on performance will end up harming productivity."

Demand for permanent technology staff was above the 68.2 national average for all types of workers, while the equivalent figure for temp IT workers fell below the UK-wide index of 68.7.

Engineering experienced the highest growth in permanent vacancies in August with a figure of 71.8 against hotel and catering's 61 at the bottom of the table.

On the temporary side, the nursing, medical and care category claimed the top spot with 73.3, compared with 59.1 for executive-professional jobs in last place.

The REC-KPMG research is conducted by Markit using a panel of 400 UK recruitment and employment consultancies. Index numbers are based on respondents reporting an improvement, no change or decline. A reading of 50 signals no change on the previous month.